Post session - Quick review

The Indian markets witnessed a choppy day of trade on Thursday with benchmark indices making a hat-trick of closing in red. Though, the start was in green tracking the sentiments in the regional peers and bourses gathered pace as the trade progressed, it seemed that after two consecutive days of drubbing, markets are finally going to see green but in the final hours sharp selling appeared and took the markets lower, though the cuts were marginal but indices came off their highs of the day reversing all the gains they accumulated during the day. Nifty continued sulking and could not manage to cross the 5000 mark, crossing below it for the third consecutive day.

The initial gains in the markets were mainly spurred by the Reserve Bank of India (RBI), which fixed the intra-day open position limit in forex trade at 5 times the available limit, and asked EEFC account holders to convert 50 percent of forex earnings into rupees within two weeks. The Reserve Bank of India said that exporters will be required to convert 50 percent of their foreign exchange holdings into rupees, in a move to support the sagging local currency. However, rupee also got some support with the report that India's trade deficit in the first month of the fiscal narrowed slightly to $13.4 billion in April, slightly lower than March’s $13.9 billion.

On the global front, the mood remained mixed, as some of Asian the indices closed with cut of quarter to half a percent after China reported slower export growth. Country’s exports rose 4.9 percent in April, much below the 8.5 percent estimate. The European markets too were mostly in red with negative risk sentiment that has been prevalent in markets amid growing concern that Greece will be forced out of the euro and that austerity plans needed to contain the Europe’s debt crisis will be derailed.

Back home, the commodity stocks suffered the most in day's trade closely followed by auto and power sector stocks, while the rate sensitive’s that have been showing some strength in early trade, too lost their strength and closed lower. Only oil & gas and consumer durables managed to close in green. The broader indices too lost their way and made a mixed closing. Auto sector came into pressure after Society of Indian Automobile Manufacturers ( SIAM) reported that Car sales in India rose an annual 3.4 percent in April, much below the 20 percent in March.

The BSE Sensex lost 44.41 points or 0.27% and settled at 16,435.17. The index touched a high and a low of 16,671.81 and 16,377.02 respectively. 12 stocks advanced against 18 declining ones on the index (Provisional)

The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1271:1491 while 146 scrips remained unchanged. (Provisional)

The BSE Mid-cap index gain 0.14% while Small-cap index was down 0.18%. (Provisional)

On the BSE Sectoral front, Consumer Durables up 0.50%, Oil & Gas up 0.48%, Bankex up 0.12% and IT up 0.04% were the only gainers while Metal was down 1.07%, Auto down 0.89%, Power down 0.68%, Capital Goods down 0.33% and Health Care down 0.22% were the top losers.

The top gainers on the Sensex were DLF up 2.47%, BHEL up 1.27%, TCS up 0.99%, ONGC up 0.92% and HDFC Bank up 0.83% while, Jindal Steel down 3.40%, Maruti Suzuki down 3.22%, SBI down 1.92%, Hero MotoCorp down 1.46% and NTPC down 1.45% were the top losers in the index. (Provisional)

India VIX, a gauge for market’s short term expectation of volatility lost 1.38% at 22.72 from its previous close of 23.04 on Wednesday. (Provisional)

Meanwhile, foreign insurers and their domestic partners have been demanding an increase in the FDI cap to 49% to fund business expansion. The Union cabinet is expected to approve the amended Insurance Laws Bill retaining FDI in insurance at 26%. It is also expected that the bill will be tabled in the Parliament in the current Budget session.

The government had introduced the Insurance Laws (Amendment) Bill in the Rajya Sabha in 2008 recommending that the FDI cap in the sector be raised to 49%, which was later sent to the Parliament’s standing committee. The standing committee however did not agree with the provision and stated that it was ‘without any sound and objective analysis of the status of the insurance sector following liberalisation’.

It further remarked that the ‘Increased role of foreign capital may lead to the possibility of exposing the economy to the vulnerabilities of the global market, flight of capital outside the country and also endangering the interest of the policy holders’.

Foreign insurers and their domestic partners have been demanding an increase in the FDI cap to 49% to fund business expansion. The panel, headed by senior BJP leader Yashwant Sinha, has agreed to the need of bringing in comprehensive changes in the outdated laws governing the insurance sector.

The S&P CNX Nifty lost 4.30 points or 0.09% to settle at 4,970.50. The index touched high and low of 5,039.30 and 4,950.30 respectively. 23 stocks advanced against 27 declining ones on the index. (Provisional)

The top gainers on the Nifty were Cairn India up 3.89%, IDFC up 2.78%, Axis Bank up 2.48%, BPCL up 2.44% and DLF up 2.31%.

On the other hand, Maruti Suzuki down 3.46%, Jindal Steel down 3.43%, Ranbaxy down 3.27%, PNB down 2.14% and Asian Paints down 2.10% were the top losers. (Provisional)

The European markets were trading in red, with France's CAC 40 down 1.38%, Germany's DAX down 0.09% and Britain’s FTSE 100 down 0.51%.

After witnessing carnage in previous session, equity indices in the Asian region snapped the day’s trade on mixed note on Thursday after European officials said Greece would get its next tranche of bailout cash but traders were nervous as politicians in Athens struggled to form a coalition. However, bargain hunting in the fundamentally strong stocks helped certain bourses to end in the green land. Meanwhile, Hong Kong shares slumped to a sixth straight loss on Thursday after Chinese April trade data came in weaker than expected, with negligible import growth raising fears of a much bigger slowdown in domestic demand. Chinese headline growth in imports unexpectedly stalled in April, at 0.3 percent which was much lower than the 11 percent Reuters consensus, raising doubts about the strength of the rebound in the world’s second-biggest economy.

However, mainland Chinese markets ended flat after a choppy session. They were up initially, but reversed course after the mid-morning release of the trade data, which accelerated losses in Hong Kong.  Japanese Nikkei ended about 0.40 percent lower at their worst finish for three months on Thursday as dealers were hit by renewed fears over Europe’s debt crisis.